Account Updater Improves Credit Card Relations

Great Expectations

AVATAS has researched the fuel delivery industry to identify trends and noted the arrival of younger customers who have different expectations from the older homeowners who sold homes to them. These “modern consumers” prefer paying bills with online banking or payments, and some are using electronic payments for all their bills except one: the fuel bill. “Many of them don’t even own checkbooks,” she said.

Fuel companies that cater to the modern consumer mindset have an advantage. These customers appreciate conveniences such as paying bills with a few keystrokes on a smartphone after receiving a bill notification by text message. They will even pay bills when they are at work or on vacation, provided the technology facilitates that, she added.

Adapting modern payment technologies doesn’t just please customers; it also speeds cash flow, because tech-savvy customers will pay bills very promptly when given the instantaneous opportunities such as text prompts.

Account Updater supports the kind of seamless relationship that modern consumers prefer, according to Gagnon. The service kicks into action when a credit card issuer, such as a bank, rejects a credit card payment with what is known in the industry as a “soft decline,” which it reports to the payment processor and the marketer. Unlike a rejection for an overdue credit card account or other customer infraction, a soft decline does not indicate a potential problem with a customer’s credit card account; rather, it generally signals that the card on file has reached its expiration date, or there has been a change of name or address on the account.

When a marketer who doesn’t use Account Updater submits a batch of credit card payments for processing and is notified of a soft decline, they typically must initiate an administrative process that involves contacting the customer by telephone, e-mail or mail to request the new card information. “It is really hard for energy companies that might have already made the delivery or have it waiting,” Gagnon explained. “Now they need to track down the consumer and use a lot of resources following up.”

Take a Load Off

When companies use Account Updater, the legwork is virtually eliminated. A payment processor such as AVATAS resubmits the payment to the credit card issuer and gets a token for the customer’s new card, which is then stored in the payment processor’s electronic vault. The payment processor then passes on the new information to the marketer, who updates their file. The marketer gets the payment that was initially declined without having to contact the customer, and subsequent payments process successfully without soft declines.

“It previously could not be resolved without customer contact, and it usually take three tries to get in contact with them,” Gagnon said. If the soft decline was for the final payment of the heating season a customer might wait until the fall when they need a new delivery to update the card, and that payment would be a receivable all summer.

Approximately 80 percent of the credit cards in use are covered by Account Updater, according to Gagnon. The exceptions are cards issued by some smaller institutions that have not enrolled in the program with MasterCard or Visa.

To take advantage of the Account Updater service, marketers need to work with a payment processor like AVATAS that offers the service. Marketers pay a fee to join the service and a separate, one-time fee for each card update.